Norway: Sweeping Measures enacted in Response to the Covid-19 Crisis have real Consequences for Employers and Employees
Like many other European countries, Norway has witnessed unprecedented intervention from the nation’s parliament and various other government agencies in recent weeks. Crisis measures include substantial alterations to, among others, the National Health Insurance Act, the Working Environment Act, the Layoff Pay Act and certain tax regulations applicable to companies. Collectively, these actions seek to lighten the burden for both employers and employees in these most challenging of times. We will quickly go through the most significant labour law-related changes.
Currently, many businesses in Norway are not allowed to operate at all and the majority of businesses have been hit particularly hard as a consequence of a host of other government issued controls imposed on employers and a general economic recession. Those still working are strongly encouraged to work from home. Moreover, stringent limitations are in place banning group gatherings in public and private settings. Schools and kindergartens are closed until further notice and health care services have been scaled down to tend only to those with very serious needs and conditions. Immediate and large-scale measures are necessary in order to effectively counter the serious public health and economic crisis caused by the global Coronavirus (COVID-19) pandemic.
Norwegian authorities, led by the centre-right government, first sought to reduce the financial consequences for companies needing to lay off employees. This initiative led to a change in the Lay Off Pay Act, with the outcome that employers now only need to pay laid off workers salaries for two days following the cessation of the employee’s obligation to work. The employer’s tax has, temporarily, been lowered by four percentage points. VAT and advance tax deadlines for payment have both been postponed.
All the while, workers who are suspected of being infected with the virus, or are already in quarantine are – as a main rule – entitled to sick pay, even though they are indeed fit for work. Employees in this category no longer need to provide a medical certificate for the first 16 days of absence, and for the time being, employers are exempt from covering sick pay rates from day four and onwards – compared to the previous sixteen.
As schools and kindergartens are closed until further notice, employees who have caring responsibilities can now be absent from work for a total of twenty working days. Previously, this quota was limited to ten days. Employers will be reimbursed by the government after three of these days are spent.
Shortly after the government announced their proposals for a first legislative crisis package, several parliamentary fractions came together to demand better conditions for laid off employees. This led to the parliament instructing the relevant government agencies to provide laid off workers a “full” salary or wage compensation up to a maximum of approximately NOK 600.000 from day three until day twenty of being laid off.
Also, the rates for unemployment benefits have been increased slightly. Additionally, the activity requirements that normally apply to such job seekers have been put on hold. People who were unemployed before the epidemic struck, have also seen their maximum dates for receiving such benefits postponed further.
Implementation of such comprehensive alterations to the welfare legislation, combined with a record-shattering unemployment rate – not equaled since the second world war – the workload confronting the Norwegian Labour and Welfare Administration (NAV) has clearly far exceeded their capacity to appropriately administer such cases, both with regards to benefit applications and to the NAVs standing responsibility to tend to vulnerable clients.
The aforementioned has led the government to seek new solutions in order to make sure that funds are transferred in a timely fashion. Therefore, from 30 March 2020, those now unemployed can apply for an advance payment of benefits. This advance payment will be settled with the final decision of the benefit application.
The terms for providing unemployment benefits have also been changed. Until recently, the clear and leading rule has been that those receiving these benefits must report all other earnings, with the effect that their benefits are truncated correspondingly. Now, however, the government has opened up the possibility for benefit-receivers to work in the agriculture industry, while still maintaining full benefits.
and self-employed individuals are now guaranteed 80 % of their income up to approximately NOK 600.000. In addition, they will be eligible for sick-pay and child-care pay (“omsorgspenger”) from day four.
Many pensioned health workers are now going back to their old jobs in hospitals. These institutions have been riddled with mass-quarantines for employees suspected of infections. Now, these pensioned workers will not have their pensions reduced correspondingly to the amount of wages they receive for the duration of the COVID-19 crisis, as is normally the case. Here, several laws regulating pension arrangements have been hastily amended to incentivise contributions from such volunteers.
Following recent negotiations between the government and the large trade unions, the collective bargaining agreements have recently been amended to allow for more flexible working time policies for government employees in critical areas, such as NAV.
Also, in the area of immigration law, the COVID-19 crisis has led to some recent alterations. The government will now permit seasonal workers to help with harvesting in the agricultural sector, given that they observe a fourteen-day quarantine following their departure to Norway. This change in regulation has received a warm welcome from farmers across the country, though many are, at the same time, still worried that a weakened domestic currency, partly due to the ongoing oil crisis, will deter some from taking the trip this year.
Interestingly, the parliament has also recently passed a bill giving the government carte blanche authority to deal with certain matters and as it relates to formal restrictions. This has triggered a huge debate within the legal community, but has not yet grabbed the substantive attention of the rest of the population. These rules will have a limited degree of influence on labour regulations.
Following this sudden onslaught of legislation rushed into law in a matter of just a few weeks, we can reasonably anticipate that there will be unique challenges ahead. Entirely new rules will inevitably lead to difficult legal interpretations – especially since many such measures have not had the benefit of undergoing a thorough, preparatory development prior to becoming law, which is the traditional legislative process in Norway. As a matter of fact, many of the important new regulations are entirely based on unfounded instructions from the parliament to the government. In addition to this, many existing rules which were not created with the current situation in mind, will probably need to be amended, as the situation continues to unfold.
Storeng, Beck & Due Lund ANS (SBDL) attorneys are available to assist you with these and other workplace issues. For more information on these articles or any other issues involving labour and employment matters in Norway, please contact Kari Andersen (Partner) of Storeng, Beck & Due Lund: SBDL at email@example.com or visit www.sbdl.no.
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